JUNE 6 2014 (The Conway Bulletin) – Azerbaijan is not doing enough to tackle corruption, the European Bank of Reconstruction and Development’s (EBRD) country chief, Neil McKain, told Reuters. The EBRD is one of Azerbaijan’s biggest foreign investors.
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(News report from Issue No. 188, published on June 11 2014)
JUNE 6 2014 (The Conway Bulletin) – Days after buying an extra 10% stake in Azerbaijan’s biggest gas project, Turkey agreed a $3.3b credit line for a subsidiary of SOCAR, the Azerbaijani state-owned energy company. The loan, which cements the two countries’ alliance, will be spent on building an oil refinery in Turkey.
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(News report from Issue No. 188, published on June 11 2014)
JUNE 5 2014 (The Conway Bulletin) – After years of delays, German energy company RWE said it would finally start an evaluation of the Nakhchivan gas and oil deposit in the Azerbaijan sector of the Caspian Sea.
The announcement is another boost for Azerbaijan’s energy sector which has seen billions of dollars of investments over the past couple of years.
Part of the attractiveness of Azerbaijan’s energy sector is its relative stability and the extra pipeline infrastructure that is being built to send supplies west to Europe.
The Azerbaijani government has been pushing RWE to move ahead with plans to develop the Nakhchivan deposit since the two sides signed a production sharing agreement in 2011.
“We hope to close everything within the next months. . . and to drill our well in the beginning of the next year.” Martin Wellens, the new projects development head at RWE told journalists at an energy conference in Baku.
SOCAR, the Azerbaijani state-owned energy company, had been getting increasingly frustrated with RWE. Media had reported that SOCAR would suspend its product sharing agreement with RWE unless it hurried up its development of Nakhchivan.
Soviet geologists first discovered Nakhchivan in the 1960s but it was not developed as there were more accessible and easier-to-drill wells that could be tapped first.
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(News report from Issue No. 188, published on June 11 2014)
JUNE 11 2014 (The Conway Bulletin) – Oil output is still falling at the Azeri, Chirag and Guneshli fields (ACG). A source at SOCAR, Azerbaijan’s state-owned energy company, said oil output dropped 2.4% in the first five months of 2014 compared to the same period in 2013. BP, the operator, had promised to stem the drop at ACG.
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(News report from Issue No. 188, published on June 11 2014)
JUNE 5 2014 (The Conway Bulletin) – Armenia accused Azerbaijan of killing two of its soldiers along the border of the disputed region of Nagorno- Karabakh, raising tension around one of the South Caucasus most delicately-balanced flash-points.
Shootouts are common between the two countries around Nagorno-Karabakh, where a barely discernible peace is held together by a fragile 1994 UN-negotiated cease-fire, but the heightened war-mongering rhetoric from Armenia alarmed international observers.
Azerbaijan denied the accusations.
Both sides are playing to their internal audience. The problem for Armenia is that the rhetoric has serious geopolitical implications.
It wants to join the Russia-led Eurasian Economic Union which also counts Belarus and Kazakhstan as members. Armenia has the support of Russian President Vladimir Putin.
Its dispute with Azerbaijan over Nagorno-Karabakh has, though, caused some consternation. Media reported that Kazakh President Nursultan Nazarbayev raised objections to Armenia’s membership because of its dispute over Nagorno- Karabakh a the signing ceremony last month.
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(News report from Issue No. 188, published on June 11 2014)
MAY 30 2014 (The Conway Bulletin) – Turkish Petroleum Corp., the state-owned Turkish oil energy company, agreed to buy an extra 10% stake in the Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea from France’s Total for $1.5b.
This means that Turkish Petroleum now owns 19% of the Shah Deniz and is Azerbaijan’s second biggest partner in the project, behind BP.
The deal shifts the energy power vertical in the region as it reduces Turkey’s reliance on Russia for supplies while increasing its dependency on Azerbaijan.
Turkey is a NATO member and with the stand-off over Ukraine continuing, shifting energy reliance away from Russia is, undoubtedly, a sensible strategy. And who better to turn to than Azerbaijan? Turkey and Azerbaijan are ethnically, culturally, politically and linguistically close. They make natural allies.
For Azerbaijan the deal is an important one as Turkey’s entry into the Shah Deniz project is a massive show of faith in its prospects. It is being upgraded in an important second phase. Turkey is also a major stake holder in the TANAP pipeline that will pump gas from the Caspian Sea to Europe.
Azerbaijan-Turkey relations have always been close, although over the past few years these have grown even closer. Azerbaijan has now established itself as a major gas supplier to Europe and it is only natural that it works increasingly closely with Turkey to secure this sector.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 29 2014 (The Conway Bulletin) -The International Bank of Azerbaijan (IBA) started promoting its Eurobond issue. IBA plans to issue between $350m and $500m of Eurobonds. Azerbaijan’s ministry of finance owns 50.2% of IBA. The Eurobond sale will indicate investors’ appetite for Azerbaijan.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 3 2014 (The Conway Bulletin) – After six months of repairs to a pipeline, Azerbaijan will re-start exporting gas to Russia, an official from SOCAR, Azerbaijan’s state energy company, said. Relations between Azerbaijan and Russia have improved this year. Oil and gas deliveries, an important indicator, have, generally, resumed.
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(News report from Issue No. 187, published on JUNE 4 2014)
JUNE 2 2014 (The Conway Bulletin) – Azerbaijan may reduce its 58% stake in the TANAP gas pipeline project that will run from the Caspian Sea to Europe, the chairman of SOCAR, Azerbaijan’s state energy company, Rovnag Abdullayev, said. TANAP is currently one of the world’s biggest pipeline projects.
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(News report from Issue No. 187, published on JUNE 4 2014)
MAY 26 2014 (The Conway Bulletin) – A court in Azerbaijan sentenced the well-regarded election monitor Anar Mammadli to 5-1/2 years in prison for tax evasion and illegal business dealings. Rights groups say Mammadli’s real crime was to be an opposition figure. The authorities are cracking down on anti-government figures.
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(News report from Issue No. 186, published on May 28 2014)